Telekom Malaysia Explores Plans for New Hyperscale Data Center with International Partnerships

CIMB Investment Bank has announced that Telekom Malaysia Bhd (TM) is reportedly considering the establishment of a new hyperscale data center  in Malaysia, intending to expand beyond its current Klang Valley Data Centre (KVDC) and Iskandar Puteri Data Centre (IPDC).

With its extensive submarine and terrestrial networks, coupled with strong local connections, TM is seen by CIMB as having the potential to attract robust international partners for co-investment in the HDC.

CIMB suggests that a strategic international partner could not only assist in funding the investment but also contribute expertise in designing and operating data centers (DCs) tailored for hyperscalers and AI workloads.

This expertise might involve implementing more efficient cooling solutions like direct-to-chip liquid or immersive cooling, along with advanced real-time server monitoring platforms to manage expensive graphics-processing unit clusters and prevent overheating.

Moreover, CIMB speculates that these strategic partners could play a role in securing tenants for the new HDC by offering expansion space to their existing DC tenants. If TM proceeds with the plan, CIMB anticipates the development of the HDC to occur in phases, with the first phase potentially being operational by the first half of 2026 if initiated in the second half of 2024.

Although there may be a limited boost to earnings in the financial years 2024 and 2025 due to the project completion timeline, CIMB believes that investors might become more enthusiastic about TM, considering the potential value creation resulting from a more aggressive expansion of its DC business.

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Hazel Moises
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